Business Process Reengineering /BPR/

[Reengineering is] the fundamental rethinking and radical redesign of business processes to achieve
dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service
and speed.
In BPR, the process to be reengineered is the so-called business process. Davenport describes a business
process as “simply a structured, measured set of activities designed to produce a specified output for a
particular customer or market”. Riemer (1998) describes business processes in an object-oriented style:
“business processes are series of steps that change states of business objects (that is, customers, orders and
inventory), thereby causing business events”. However we should note that BPR is concerned with
customer-orientation. Thus the outputs of business processes should not only achieve the company’s
objectives, but also need to satisfy customers’ requirements. From these definitions we can conclude that
business processes start and end with customers, and the value of business processes is dependent upon
customers.
Before BPR emerged (and even today), it was widely accepted by industries and business enterprises that a
work should be broken down into its simplest (and most basic) tasks. This leads to the structure of
enterprises becoming hierarchical – or functional – in order to manage such divided tasks.
These hierarchical or functional structures were commonly used for a period. However enterprises of these
structures later encountered some problems, especially when the competitive environment has changed
beyond what we can recognise3. Today, many enterprises face competition from the global business
environment as well as the fact that the taste of customers is becoming complex. As Hammer (1990)
argues, “in order to achieve significant benefits, it is not sufficient to computerize the old ways, but a
fundamental redesign of the core business processes is necessary”. New organizational structures, which
are more suitable to today’s environment in which enterprises can understand their current activities and
find potential problems, are needed. MacIntosh and Francis suggest that it is becoming more important “to
develop new products effectively than to produce old products efficiently”. By introducing fast developing
information technology, enterprises try to redesign their structures and seek new ways of operation, which
results in many enterprises moving toward combination but not division of labor. Hammer and Champy
conclude that previously divided tasks are now being re-unified into coherent business processes. Thus one
reason why BPR becomes popular is that it provides a mechanism to make the changes better to fit the
competitive environment to which the enterprises must adapt themselves in this new and post-industrial
age.
The Key Concepts
BPR seeks to break from current processes and to devise new ways of organizing tasks, organizing people
and making use of IT systems so that the resulting processes will better support the goals of the
organization. This activity is done by identifying the critical business processes, analyzing these processes
and redesigning them for efficient improvement and benefit.
• Radical change and assumption challenge;
• Process and goal orientation;
• Organizational re-structuring;
• The exploitation of enabling technologies, particularly information technology.
That is, by focusing on business objectives, we analyze the processes of the organization, eliminate non-
essential or redundant procedures, and then use IT to redesign (and ‘streamline’) organizational operations.
Generally the topic of BPR involves discovering how business processes currently operate, how to redesign
these processes to eliminate the wasted or redundant effort and improve efficiency, and how to implement
the process changes in order to gain competitiveness. The aim of BPR, according to Sherwood-Smith
(1994), is “seeking to devise new ways of organizing tasks, organizing people and redesigning IT systems
so that the processes support the organization to realize its goals”.
 Kaizen
The foundation of Kaizen was laid in Japan after the Second World War, when the country was attempting
to rebuild factories and rethink many systems. The concept of Kaizen began to be formed and it took off in
the 1950s.
There are five underpinning principles to kaizen. The first is a heavy reliance on teamwork, in which
everyone's opinion is valued and considered, involving their active participation in the form of suggestions
aimed at continuous improvement, even when a system appears to be functioning adequately. Kaizen
philosophy recognizes that there is always room for improvement. Finally, the system uses quality circles,
groups of workers who meet and work together to solve problems and come up with innovative changes.
This feature of Kaizen philosophy is clearly based on the Japanese cultural tradition, which puts greater
emphasis on group consensus building. The focus on human resources building within Kaizen strategy has
anticipated the post-modern developments in the field of management and competitive advantage. Kaizen
is a system that involves every employee - from upper management to the cleaning crew. Everyone is
encouraged to come up with small improvement suggestions on a regular basis.
In business Kaizen encompasses many of the components of Japanese businesses that have been seen as a
part of their success. Quality circles, automation, suggestion systems, just-in-time delivery, Kanban (notice
board, as a form of integrated control of part supplies) and 5 S are all included within the Kaizen system of
running a business. As asset of principles, Kaizen is often presented in the form of guidelines:
1. Discard conventional fixed ideas.
2. Think of how to do it, not why it cannot be done.
3. Do not make excuses. Start by questioning current practices.
4. Do not seek perfection. Do it right away even if it will only achieve 50% of target.
5. If you make a mistake, correct it right away.
6. Throw wisdom at a problem, not money.
7. Ask 'WHY?" five times and seek root causes.
8. Seek the wisdom of ten people rather than the knowledge of one.
9. Don't ask workers to leave their brains at the factory gate.
The objectives of Kaizen include eliminating waste or activities that add cost but not value, just-in time
delivery, production load leveling of amount and types, standardized work, paced moving lines and right-
sized equipment. Basically, Kaizen takes processes, systems, products, and services apart then rebuilds
them in a better way. Kaizen goes hand-in-hand with that of quality control.
Kaizen does not view problems as negative but rather sees them as positive opportunities for improvement.
To implement change, Kaizen finds, reports, and fixes problems. This program encourages rewarding
employees who expose inefficiencies and other issues. Kaizen is about taking action to generate
suggestions then implementing productive ideas as soon as possible.
Kaizen results in improved productivity and quality, better safety, faster delivery, lower costs and greater
customer satisfaction. Furthermore, employees find work to be easier and more enjoyable— resulting in
higher employee morale and lower turn-over. Outcomes include:
 Reduction in waste in areas such as inventory, waiting times, transportation, worker motion,
employee skills, over production, excess quality, and in-processes
 Improvement in space utilization, product quality, use of capital, communications, production
capacity, and employee retention
 Immediate results. Instead of focusing on large, capital-intensive improvements, Kaizen focuses on
creative investments that continually solve large numbers of small problems. The real power of
Kaizen is in the on-going process of continually making small improvements that improve overall
processes and reduce waste.
 Theory Z

Theory Z management tends to promote stable employment, high productivity, and high employee morale
and satisfaction. Theory Z focused on increasing employee loyalty to the company by providing a job for
life with a strong focus on the well-being of the employee, both on and off the job.

Theory Z is a management concept that looks at motivating workers. It is of benefit to managers and
business owners as it describes the main advantages, drawbacks, success factors and case evidence from
some of the market leaders.

The benefits of using Theory Z include reducing employee turnover, increasing commitment, improving
morale and job satisfaction, and drastically increasing productivity.

To realize these benefits, he argued that an organization should have the following:

 A Strong Company Philosophy and Culture: The company philosophy and culture needs to be
understood and embodied by all employees, and employees need to believe in the work they're doing.
 Long-Term Staff Development and Employment: The organization and management team has
measures and programs in place to develop employees. Employment is usually long-term, and
promotion is steady and measured. This leads to loyalty from team members.
 Consensus in Decisions: Employees are encouraged and expected to take part in organizational
decisions.
 Generalist Employees: Because employees have a greater responsibility in making decisions, and
understand all aspects of the organization, they should be "generalists." However, employees are still
expected to have specialized career responsibilities.
 Concern for the Happiness and Well-Being of Workers: The organization shows sincere concern
for the health and happiness of its employees, and for their families. It puts measures and programs in
place to help foster this happiness and well-being.
 Informal Control with Formalized Measures: Employees are empowered to perform tasks the
way they see fit, and management is quite "hands off." However, there should be formalized measures
in place to assess work quality and performance.
 Individual Responsibility: The organization recognizes the contributions of individuals, but
always within the context of the team as a whole.
Theory Z continues management style based on the assumption that:-
1. Employees want to build cooperative relationship with their employers, peers and other employees in
the firm, for this they
2. Require high degree of support in the form of secure employment and facility for development of
multiple skills through training and job rotation,
3. They value family life, culture and tradition and social institution as much as material success,
4. They have well developed sense of dedication, moral obligation and self- discipline, and
5. They can make collective decision through consensus.